Buffett and Munger see auto dealerships facing uncertain prospects over the next 5 to 10 years. Many dealers undervalue their service and parts operations, while Tesla's post-sale customer experience shows what's possible when you get it right.
There was an interesting thing the other day. So I think we're going on a week now, but Berkshire Hathaway did their quarterly.
Kind of. Is it quarterly or annually? Maybe it's annual. Stock shareholder.
Yeah. And the amazing thing about that is that Buffett was up on that stage with some guy that looked twice as old as he is. Did you see that feller? Those right next to him? I don't. Charles or something like that. He's very high up in the company, but like that guy looked old.
Like Moses old. You wouldn't call him high up. You would call him a partner.
Yes. Yeah.
Have you ever read his book?
No.
He's got a great book.
I couldn't stop staring.
He maybe is the brains behind the whole thing.
Oh, that wouldn't surprise me. He spoke quite eloquently. But continue on.
Back when I was a lot attendant. So we're going back many, many years. There was a technician in our Volkswagen shop.
He was a younger kid, and I don't know, we were talking about stuff. I was in a band, and.
Somehow it came up that he had inherited Berkshire Hathaway stock. And then he was explaining it to me.
And back then.
I think it was like 50,000 a share or something crazy.
Whoa. Okay.
But if you imagine. I think he had 10 shares or something.
So half a million then.
If you can imagine whatever that has done since then, it's crazy. He doesn't have to work, but they own. So Berkshire Hathaway, Warren Buffett owns the Van Tile Group. So he bought the Van Tile Group. I would speculate that they bought it more for the warranties. Right. Because they're really their specialty and how they've expanded his insurance, but they're talking about that. So maybe kind of give everybody a little bit of insight into their feelings about the dealership business. Because I had a lot to say.
Yeah. So the thing I thought that was really interesting about what Warren said about it is he's like, and I'm an interested party in the dealership model. He's like, this affects me. And the scariest thing to him, he's like, I know what's going to happen to Apple in five to 10 years, but I can't tell you in five to 10 years what the dealership world's going to be like, and I'm a part of it. Whereas he's always been kind of known as being the prognosticator of business. And he makes some really good forecasts and everything like that. But he literally the guy that argues.
Me Say too, like it's. It's a high investment. Low, low return or something.
Yes. So he was. I mean, if you read between the lines, it was like, it's not the best thing to get into right now.
Yeah. And so I want everybody to really pay attention to what I'm about to say next, because I think this is a turn in the industry that's going to happen.
That we've talked about for quite a while, but nobody really acknowledges it yet. But it's going to become very, very prominent in the sense of. Charlie Munger and Warren Buffett both think of the dealership business in terms of what? Like, how do they measure.
The dealership.
Business for someone like that? A company, I would guess, earnings per share.
No. So they're. We're just talking about the business on its own. On the side. The financial.
Oh, sales.
Yeah. So they're gonna be like most car dealers out there. When they wake up in the morning, the first thing they think about is how. How many. How many vehicles have gone over the curb. Right.
Yep.
They don't understand the degree of money left on the table by fixed ops. Like, if. If Charlie and Warren were really intimately involved in the business, they would be talking about how do we get more kids to be technicians? They would be talking about service. The one thing that I can say is if you're a person who's watching the news and hearing all these negative narratives about the car industry when it comes to fixed ops, and this includes parts and body shops, we're not going anywhere for a long time. These cars are still on the road. It doesn't matter if tomorrow a million new electric cars sold and we didn't have combustion, you know?
Yeah. Like, if they turn the fossil up tomorrow, it doesn't change service.
No, I agree with that. And so electric cars break as much as anything. Right. And so when are we as an industry going to focus on the things that, you know, really matter in the end, which is going to be the. The customer's feelings about the vehicle after the purchase.
That's right.
The retention. Right.
Maintaining the love affair.
And I think Tesla got that from the very beginning. Right. They didn't. They didn't sit around and talk about, oh, you got to come to us, or whatever. They, you know, they invested widely in a network that they controlled that we know. When my Tesla breaks down, it's very easy. It's not that it doesn't break down. It's just way easier than when any of my other.
But literally, you open the app and it does it all for you. Yeah, it is not very difficult to do service on a Tesla.
So it's just interesting that nobody's talking about fixed stops when fixed stops is the future. And if you were really thinking about this as a long term thing, you would be investing in, you know, getting kids out of high school, all kinds of other things to create a better business opportunity and leverage in the marketplace because he has the technicians is going to win for sure.
Thanks so much for watching this clip of Service Driving Revolution. We're uploading new stuff every day, so make sure you subscribe and click the Bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call eight three, ask SDR and we'll answer your question on the show. That's 8333 Ask SDR. For special deals on our books and training, head over to offers.chriscollinsinc.com now that's offers.chriscollinsInc.com I'm Chris Collins and I'll see you in the next video.
